An operator’s guide to product strategy | Chandra Janakiraman (CPO at VRChat, ex-Meta, Headspace)

What is Product Strategy?

Product strategy is a critical element that bridges the gap between a company's mission, vision, and its planning process. It describes a clear path involving the deployment of scarce resources to achieve the maximum impact, thereby enhancing a product's resonance with the market.

Positioned between the aspirational elements of mission and vision and the tangible execution in planning, product strategy necessitates making deliberate choices to determine where efforts should be concentrated. These decisions are crucial as they streamline processes, ensuring that the company's goals align with its strategic pursuits.

By focusing on a set of strategic pillars, a company can distinguish between areas of focus and those that are strategically deemphasized. This clarity in direction not only aids in effective resource allocation, but also strengthens alignment and collaboration across teams.

How to Begin Developing a Product Strategy?

• Form a Strategy Working Group:

  • Include key roles like engineering, product, design, and data to ensure comprehensive insights.
  • Assign a PM to drive the strategy formulation process, keeping the team aligned.

• Set Clear Expectations:

  • Explain that the preparation phase spans about four weeks to facilitate deep analysis and alignment.
  • Emphasize the goal of creating a robust meta-analysis of user behaviors and insights to guide the strategy.

• Assign Action Items:

  • Distribute tasks such as gathering UXR insights, conducting leadership interviews, and performing competitive analysis among group members.
  • Encourage user observation to build empathy and understanding of user needs.

• Prepare for Comprehensive Readout:

  • Aggregate all gathered data into a single, concise deck.
  • Ensure this deck covers behavioral insights, strategic interviews, and competitive landscape for effective resource allocation.

These steps provide a structured approach to align your team and set the groundwork for successful product strategy framework.

What is the Strategy Sprint Process?

A strategy sprint is a concentrated effort designed to identify problems, cluster them into themes, and prioritize strategic pillars. The process follows a structured approach as outlined below:

1. Share and Align: The initial day focuses on sharing collected insights regarding user behavior, competitor analysis, and leadership interviews. Team members note down problems affecting growth and business operations, fostering alignment on current issues.

2. Problem Clustering: On the second day, participants generate a comprehensive list of problems. These are then clustered into 10-15 thematic groups, transforming them into opportunity statements, such as turning "difficulty finding things" into "enhancing discoverability."

3. Prioritization of Pillars: Finally, the team prioritizes these opportunities by ranking them based on expected impact, certainty of impact, clarity of solutions, and uniqueness to the organization. The top three clusters become the strategic pillars guiding future actions.

This sprint provides a focused framework, ensuring collaboration and consensus within the team while establishing a strategic direction.

How to Execute a Design Sprint?

The design sprint serves a crucial role in strategy validation by transforming strategic pillars into illustrative concepts. This process ensures the strategy is not just theoretical but visually and practically comprehensible.

• Purpose and Goals:

  • Generate numerous illustrative concepts that bring the strategic pillars to life.
  • Focus on creating concepts rather than ready-to-launch features.

• Input and Output:

  • Start with the strategic pillars and corresponding "How Might We" statements.
  • Produce a range of illustrative concepts that align with each pillar.

• Process and Collaboration:

  • Lead by design team with input from the strategy working group.
  • Encourage exploration and creativity to visualize the strategic direction.

These concepts act as powerful tools for communicating the strategy, fostering alignment and understanding among stakeholders. For further strategies in identifying customer needs, consider exploring concepts like the Bullseye Customer Sprint.

What is the Role of Document Writing in Strategy?

Developing a cohesive strategy document is an integral step in the product strategy development guide. It compiles insights from various phases into a unified narrative, ensuring that every strategic pillar is clearly articulated and defendable.

With a foundation built on behavioral insights, UXR meta-analysis, competitive comparisons, and strategic priorities, the document serves as both a reference and a communication tool. Its purpose is not just to document findings, but also to weave them into a compelling story that aligns stakeholders and paves the way for execution.

Key components, like the strategic pillars, are further supported with detailed justifications and rankings. The document often includes appendices with raw data and strategic comparisons for transparency and to aid in discussions during roadshows and stakeholder meetings.

To craft an effective strategy document, strong writing skills are essential. The focus should remain on clarity and alignment, ensuring that the strategy is not just understood but championed across the organization. By maintaining a clear and articulate strategy document, teams can avoid misalignments and drive toward shared goals effectively.

How to Roll Out Your Strategy?

Executing a strategy rollout involves strategic engagement with stakeholders and meticulous planning. Start by addressing key steps to ensure a successful transition from strategy formation to execution.

• Engage with Gatekeepers: Prioritize receiving one-on-one alignment from essential leaders. Their support is critical for gaining momentum for your strategy.

• Stakeholder Presentations: Conduct group reviews with stakeholders potentially impacted by the strategy. Utilize these sessions to clarify strategy elements and garner support.

• Organize Team Roadshows: Host smaller, interactive sessions with teams. This intimate setting encourages dialogue and helps address concerns, fostering team buy-in and understanding.

• Manage Feedback: Clarify and incorporate vital feedback without compromising core strategic pillars. Adjust only if substantial evidence suggests a shift is necessary, ensuring the strategy remains focused and defensible.

Implementing these steps ensures a streamlined strategy rollout, cohesive stakeholder alignment, and a higher probability of success.

What are the Differences Between Small S and Big S Strategy?

The 'small s' strategy is primarily problem-focused and aims to address existing issues within a product's ecosystem. This approach is dubbed "present forward," as it centers on improving what already exists. Typically led by product managers, the small s strategy operates within an 18 to 24-month horizon. The process includes preparation, a strategy sprint, a design sprint, document writing, and rollout—concentrating on delivering swift yet informed solutions through rigorous alignment and detailed analysis.

On the other hand, 'big S' strategy is more aspirational, shifting the focus from immediate problems to envisioning an ambitious future for the company or product. This "future backward" approach involves a broader time frame, extending from three to ten years or more. Led by design and user experience researchers, the big S strategy begins with expansive leadership interviews, trend analysis, and creating multiple future scenarios. It culminates in prototyping visionary concepts, testing these ideas, and abstracting elements that resonate with users.

Both strategies inform the roadmap but tackle different aspects: the immediate improvement for small s and transformative innovation for big S. These methodologies, while distinct, complement each other to form a holistic approach to long-term and short-term strategic planning.

How Can AI Enhance Strategy Development?

AI tools are revolutionizing the strategy formulation process by streamlining everything from preparation to execution. Here's how they can enhance your strategy development:

• Research and Analysis: AI can perform competitive analysis by reviewing vast amounts of data, summarizing trends, and even conducting head-to-head comparisons of industry players. This capability allows strategists to understand market dynamics swiftly and efficiently.

• Mock Strategy Generation: By generating comprehensive mock strategies, AI assists teams in brainstorming initial plans. These strategies serve as a robust base, allowing teams to apply contextual judgment to refine and focus their strategic efforts.

• Future Development: The potential of AI in multi-agent models promises further advancements. Imagine a scenario where automated agents manage aspects of strategy formulation, constantly refining ones like onboarding through dynamic real-time adjustments.

For more insights on leveraging AI in strategy and other processes, consider exploring how Seth Godin uses AI to enhance creativity.